Monday, July 6, 2009

Tough times for latin leftist leaders

Chavez Populism sounds like a great idea at the time till it gets a double bitchslap by economic reality and common sense. The example below with Bolivia and Chile is a fine example of not thinking things out.

The populist leaders of the six countries have seemed to operate from a stylebook written by Chavez, albeit with some differences, analysts said.

In general, the populists have brooked little opposition while bashing capitalism, knocking the press, denouncing the United States whenever possible and dividing the public by viciously attacking real and imagined enemies.

In most cases now, however, the six presidents find their national bank accounts dropping dangerously low because they doled out too much cash during the boom times.

The drop in oil prices has forced Chavez, for example, to slow the import of car parts, while Ecuador's Rafael Correa has practically stopped the import of new clothes.

Nicaragua's Daniel Ortega is getting less foreign aid that he badly needs because of his virulent speeches against the United States and foreign investors.

"Populism is running out of gas in Latin America, and it's beginning to show," Arturo Porzecanski, a native Uruguayan who is a professor of International Finance at American University, said in a telephone interview.

.....In Bolivia, which has an Indian majority, Morales is the first self-identified indigenous president in the country's history and remains popular.

But investment in the country's most important industry — natural gas — has been moribund with Morales' decision to jack up taxes on the foreign producers and force them to operate under new contracts.

In an ominous sign for Bolivia, neighboring Chile last week began receiving its first shipment of natural gas delivered in tankers from foreign countries.

Chile has built the infrastructure to receive the natural gas to avoid the need for natural gas from Bolivia. Brazil, Bolivia's biggest customer, will soon lessen its dependence on Bolivia by opening its own natural gas ports.

"The populists are very good at leveling indictments against the old political order and getting a political bounce for that," said Michael Shifter, vice president of the Inter-American Dialogue. "But it's no substitute for governing."